HMRC play fast and loose

09 Apr 2015

A medium sized corporate client of Collyer Bristow got into temporary cash flow difficulties and, as a result, HMRC filed a petition for the winding up of the company for arrears of VAT. At the request of the company, HMRC confirmed in writing that it would not take steps to advertise the winding up petition until the last possible moment to enable the company to make proposals for settlement of the debt. The company was and remains able to pay the VAT but over a period of two months. About ten days later, HMRC emailed the client stating that it had changed its mind and was intending to advertise the petition in The London Gazette the following day. We instructed counsel and, with minutes to spare before The London Gazette went to print, obtained an injunction to restrain advertisement, at least until the return date of an on notice application. We argued successfully that the step taken by HMRC was capricious and procedurally unfair. They were stopped from advertising until the agreed date because the client had relied on the representation to its detriment.

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